Jan 12, 2017 11:41:04 AM

Slamming Is The New Identity Fraud, Here Is How To Protect Yourself

Written by Nancy Bakanowicz

The implementation of EMV has brought better security and more data protection to payment card transactions, but it has also birthed a new scam called slamming-is-the-new-identity-fraud slamming. According to the Better Business Bureau (BBB), slamming within the payment processing industry is a deceptive sales practice intended to switch a business merchant service provider without their consent or knowledge.

When slamming occurs, a merchant is contacted by a person pretending to be a representative of merchant services provider and states that the payment terminals are not compliant with a new feature due to recent upgrades and offers to reprogram or update the terminals at no cost to the merchant.

Unfortunately, consent to reprogram or update the terminal opens the door for the scammer to begin charging the merchant payment processing fees from the scammer’s company. However, the merchant is still under contract with their former processor, resulting in double billing. Even worse, the new fraudulent fees may cause the merchant to be in breach of the original merchant services contract because most contracts state the merchant cannot process payments through any other company, a violation that could result in huge termination fees.

So how can you protect yourself against slamming? There are some simple steps to take that can be taken. They may seem rather common-sense, but sometimes being confronted by a scammer can relax common sense, so reviewing these steps now will help you later should you find yourself in this situation:

Verify identity. If a gas company representative comes to check your meter, wouldn't you want to be sure the person is the company they represent? You should be suspicious if the caller says he is representing anyone other than your account manager from your merchant services provider. Also, keep in mind that Visa and MasterCard do not directly service merchant accounts, so if anyone calls saying he or she are is from one of those two card brands, hang up.

Avoid confusion. Slammers will try to get you flustered by throwing out a lot of industry jargon to confuse and frighten you, especially when they start using terms like “non-compliance.” Your provider will never make things exceptionally confusing for you; he will do his best to make sure you understand the terminology. If this happens to you, hang up and call your provider to find out about any regulatory changes.

No over-the-phone changes. If the caller tries to gain your consent to make changes in your service over the phone, hang up. You should never feel pressured to change service, sign a contract or schedule an on-site visit to update your terminals. Also, keep in mind anything you agree to could be legally binding, so do not give your consent unless you are sure of whom you are dealing. You always have the right to say NO to any phone solicitation.

Contact your attorney general. If a slammer contacts you, try to get as much information as you can and report it to your state’s attorney general. Slamming is a crime, and any information you can provide will help the authorities identify, locate and stop slammers before they can harm other businesses.

Keeping these points in mind when someone calls under the guise of a merchant account services representative will help you decipher that person's legitimacy. A well-informed merchant is a slammer’s worst nightmare.

Educate yourself on how slammers operate and share this information with employees and fellow merchants to prevent yourself from falling victim, and help others avoid that fate, as well.